Energy Conservation Standards for

Packaged Terminal Air Conditioners and 

Packaged Terminal Heat Pumps

Notice of Proposed Rulemaking (NOPR

Public Meeting 

Building Technologies Program

Office of Energy Efficiency and Renewable Energy

U.S. Department of Energy

May 1, 2008

http://www.eere.energy.gov/buildings/appliance_standards/commercial/packa

EERE-2007-BT-STD-0012 COMMENT 11
Meeting Agenda

9:00-9:05 am Welcome 9:05-9:15 am Introduction and Agenda Review9:15-9:30 am Rulemaking Overview9:30-10:15 am Opening Remarks from Interested Parties10:15-11:15 am Market and Technology Assessment, Screening Analy

Engineering Analysis

11:15-11:30 am Break11:30-12:30 pm Energy Use Analysis and Life-cycle Cost Analysis12:30-1:30 pm Break for Lunch1:30-2:00 pm National Impact Analysis2:00-2:30 pm Trial Standard Levels and Manufacturer Impact Analys2:30-3:00 pm Utility Impact Analysis, Employment Impact Analysis, 

Environmental Assessment, and Regulatory Impact A

3:00-3:15 pm Break3:15-4:15 pm Discussion of Issues4:15-4:30 pm Closing Remarks

EERE-2007-BT-STD-0012 COMMENT 11
 Purposes

• To present methodologies and characterize results for rulemaking analyses• To discuss specific issues related to each analysis;• To seek input from interested parties on methodologies, assumptions, data 

results from the analyses; and

• To describe the next steps.

 Comments from Participants

• Participants are invited to provide summary comments or statements;• Participants are invited to raise additional issues for discussion today; and• NOPR comment period open through May 31, 2008.

Purpose of the Public Meeting and 

Comments From Participants

EERE-2007-BT-STD-0012 COMMENT 11
Statutory Authority – Energy Policy and 

Conservation Act as amended

 Addresses requirements of 42 USC 6313(a)(6)(A)-(B):

• Review and adopt efficiency levels specified by ASHRAE Standard 90.1-199• DOE determines, supported by clear and convincing evidence, that adoption 

national standard more stringent than the efficiency levels specified by ASH

90.1 for PTACs and PTHPs would result in significant additional conservatioand is technologically feasible and economically justified.

EERE-2007-BT-STD-0012 COMMENT 11
DOE Actions on PTACs and PTHPs

 Test Procedures – Final Rule published on October 21, 2004, based 

standards (ARI 310/380-2004 Standard for Packaged Terminal Air-CoHeat Pumps (ARI 310/380-2004)). 69 FR 61962.

 Energy Conservation Standards

• Screening Analysis published March 1, 2000. 65 FR 10984.• Notice of Document Availability published March 13, 2006. 71 FR 12634.• Technical Support Document published March 13, 2006.• NOPR published in the Federal Register on April 7, 2008. 73 FR 18858.• Final Rule scheduled for September 2008.

EERE-2007-BT-STD-0012 COMMENT 11
The Energy Policy and Conservation Act (EPCA) 

DOE to consider seven factors when setting en

conservation standards

Factor Analysis

1. Economic impact on consumers 

and manufacturers

Life-cycle cost analysisManufacturer impact analysis

2. Lifetime operating cost savings Life-cycle cost analysis3. Total projected energy savings National impact analysis 4. Impact on utility or performance Screening analysis

Engineering analysis

5. Impact of any lessening of 

competition

Manufacturer impact analysis

6. Need for national energy 

conservation

National impact analysis

7. Other factors the Secretary 

considers relevant

Environmental assessmentUtility impact analysisEmployment impact analysis

EERE-2007-BT-STD-0012 COMMENT 11
Prop

Proposed Amended Energy Conservation Standards 

Equipment Class Proposed En

Conservation Sta

Equipment Category Cooling Capacity 

PTAC

Standard Size**

< 7,000 Btu/h EER = 11.4

≥ 7,000 Btu/h and 

≤ 15,000 Btu/h EER = 13.0 – (0.233 

> 15,000 Btu/h EER = 9.5

Non-Standard Size†

< 7,000 Btu/h EER = 10.2

≥ 7,000 Btu/h and 

≤ 15,000 Btu/h EER = 11.7 – (0.213 

> 15,000 Btu/h EER = 8.5

PTHP

Standard Size**

< 7,000 Btu/h EER = 11.8 COP = 3.3

≥ 7,000 Btu/h and 

≤ 15,000 Btu/h

EER = 13.4 – (0.233 

COP = 3.7 – (0.053 

> 15,000 Btu/h EER = 9.9 COP = 2.9

Non-Standard Size†

< 7,000 Btu/h EER = 10.8 COP = 3.0

≥ 7,000 Btu/h and 

≤ 15,000 Btu/h

EER = 12.3 – (0.213 

COP = 3.1 – (0.026 

> 15,000 Btu/h EER = 9.1 COP = 2.8

* For equipment rated according to the DOE test procedure (ARI Standard 310/380-2004), all energy efficiency ratio (EERat 95oF outdoor dry-bulb temperature for air-cooled equipment and evaporatively-cooled equipment and at 85oF entering wwater cooled equipment. All coefficient of performance (COP) values must be rated at 47oF outdoor dry-bulb temperature equipment, and at 70oF entering water temperature for water-source heat pumps.** Standard size refers to PTAC or PTHP equipment with wall sleeve dimensions greater than or equal to 16 inches high, oto 42 inches wide.† Non-standard size refers to PTAC or PTHP equipment with wall sleeve dimensions less than 16 inches high and less tha†† Cap means cooling capacity in thousand British thermal units per hour (Btu/h) at 95oF outdoor dry-bulb temperature.

EERE-2007-BT-STD-0012 COMMENT 11
Proposed Standard

(Issue #10)

DOE invites comment on the proposed standard level, TSL 4, for standard size and non-standard size PTACs and PTHPs.

Prop

EERE-2007-BT-STD-0012 COMMENT 11
NOPR Analyses Flow Diagram

NOPR Final Rule

Energy UseCharacterization

Market and TechnologyAssessment

ScreeningAnalysis

EngineeringAnalysis

Markups toDetermineEquipmentPrice Life-Cycle

Cost andPayback Period Analysis

ShipmentsAnalysis

EERE-2007-BT-STD-0012 COMMENT 11
 Market & Technology Assessment

• To characterize the PTAC and PTHP markets to determine available equipmen

and shipments by equipment class.

 Screening Analysis

• To identify design options that increase efficiency and to apply screening criter

by DOE to determine which design options to evaluate and which to screen ou

 Engineering Analysis

• To characterize manufacturer cost-efficiency relationships for higher efficiency • To evaluate design options that improve efficiency relative to the baseline units• Sensitivity analysis to look at current material prices.

Purpose

EERE-2007-BT-STD-0012 COMMENT 11
Market Characteristics

 Standard Size PTACs and PTHPs

• Five manufacturers account for approximately 90% of the domestic market sha

size PTAC and PTHP equipment.

• Approximately 380,000 units covered by this rulemaking were shipped in 2006 

data).

• Majority of standard size equipment is manufactured overseas. There is only o

manufacturer of standard size equipment operating in the United States.

 Non-standard Size PTACs and PTHPs

• Three major manufacturers account for the majority of the domestic market sh

standard size PTAC and PTHP equipment.

• Approximately 70,000 units covered by this rulemaking were shipped in 2006 (• Non-standard size equipment is manufactured in the United States.

Market and Technolo

EERE-2007-BT-STD-0012 COMMENT 11
Equipment Classes

 PTACs and PTHPs – DOE proposes 12 equipment classes differen

equipment type (i.e., air conditioner or heat pumps), wall sleeve di

(i.e., standard and non-standard), and cooling capacity.

 For differentiating non-standard equipment, DOE proposed two alt

methods in the NOPR:

• Equipment classes consistent with ASHRAE/IESNA Standard 90.1-1999; or• Equipment classes consistent with Addendum t to ASHRAE/IESNA Standard 

Market and Technolo

EERE-2007-BT-STD-0012 COMMENT 11
Equipment Class Organization

(Issue #1)

DOE invites comments on the selected equipment class orga

for PTACs and PTHPs.

• Specifically, the delineations specified in ASHRAE/IESNA 

90.1-1999 compared to the delineations specified in AddenASHRAE/IESNA Standard 90.1-2007 (i.e., AHRI’s continuomaintenance proposal to ASHRAE).

Market and Technolo

EERE-2007-BT-STD-0012 COMMENT 11
Screening Analysis Method

Scr

 Design options screened using the following criteria:

• Technological feasibility;• Practicability to manufacture, install and service;• Adverse impacts on product utility or product availability; and• Adverse impacts on health or safety.

 Technologies selected for further consideration:

Technologies that can improve energy-efficiency ratio (EER

• Higher-efficiency compressors• Increase heat exchanger area (extension of surface area or addition of co

• Re-circuiting heat exchanger coils

EERE-2007-BT-STD-0012 COMMENT 11
Downstream Ana

• Life-Cycle Cost an

Payback Period

• National Impacts

Cost – Efficiency 

Relationship

Incremental 

Manufacturing Cost

EER

Engin

 Characterize the relationship between manufacturer cost and effic

(EER or COP)

Purpose of the Engineering Analysis

EERE-2007-BT-STD-0012 COMMENT 11
 Equipment classes analyzed

• DOE prioritized the analysis by focusing on the equipment classes and coolin

with the highest shipment volumes.

– For standard size equipment, DOE analyzed 9,000 Btu/h and 12,000 Btu

PTHPs.

– For non-standard size equipment, DOE analyzed 11,000 Btu/h PTACs a

 Design-option approach

• DOE analytically derived cost-efficiency curves.• DOE developed baseline cost and incremental costs based on the physical te

analysis and the manufacturing cost model.

 EPA mandated refrigerant phaseout of R-22 in 2010

• Currently, PTACs and PTHPs utilizing R-410A refrigerant are not available on • Engineering analysis estimated a degradation in system performance based o

studies and similar market transformations.

Engin

Engineering Analysis Method

EERE-2007-BT-STD-0012 COMMENT 11
Extension of Proposed Energy Conservation Sta

for Standard Size PTACs and PTHPs

(Issue #2)

 This approach is intended to streamline the analysis by focusing 

shipment volume equipment classes and avoiding analysis on mu

capacities.

Engin

DOE invites comments on the extension of the energy conservstandard from the two cooling capacities with the highest numshipments to the other cooling capacities for standard size eq

For Standard Size PTACs and PTHPs, translation of standard 

equation, avoiding additional downstream analysis

Cooling Capacity

Energy Efficiency Ratio 9,000 Btu/h 12,000 Btu/h ASHRAE Standard 90.

Energy-Efficiency Equa

Amended EnergyEfficiency Equation

EERE-2007-BT-STD-0012 COMMENT 11
Extension of Proposed Energy Conservation Sta

for Non-Standard Size PTACs and PTHPs

(Issue #2)

 This approach is intended to streamline the analysis by focusing o

shipment volume equipment classes and avoiding analysis on mul

capacities.

Engin

DOE invites comments on the extension of the energy conservstandard from one cooling capacity to the other cooling capacthe ASHRAE slope for non-standard size equipment.

For Non-Standard Size PTACs and PTHPs, translation of standard 

equation, avoiding additional downstream analysis.

Cooling Capacity

Energy Efficiency Ratio 11,000 Btu/h ASHRAE Standard 90.1-199

Energy-Efficiency Equation Amended Energy- Efficiency Equation

EERE-2007-BT-STD-0012 COMMENT 11
EPA Mandated Refrigerant Phaseout of R-2

 PTAC and PTHP Market:

• PTAC and PTHP Equipment using R-410A refrigerant are not available on th• R-410A compressors are less efficient than R-22 compressors, which transla

efficiency degradation.

 DOE is using an overall lower system performance for PTAC and P

equipment with R-410A. 

• For standard size PTACs and PTHPs with 9,000 Btu/h cooling capacity: 6.3 • For standard size PTACs and PTHPs with 12,000 Btu/h cooling capacity: 7.6 • For non-standard size PTACs and PTHPs of all cooling capacities: 6.8 perce

 Additional concerns:

• Compressor availability;• Increase in component cost (i.e., increase heat exchanger and compressor c• Timing of refrigerant phaseout and amended energy conservation standards.

Engin

DOE invites comments on the potential impacts of the refrigeraphaseout on PTAC and PTHP equipment, the industry, and the of components used in PTAC and PTHP equipment.

EERE-2007-BT-STD-0012 COMMENT 11
Extension of Proposed Energy Conservation Sta

(Issue #3)

 This approach is intended to streamline the analysis by focusing 

on the cooling mode and determining the heating mode efficiencimarket data.

Engin

DOE invites comments on the EER and COP pairings for PTHPthe current ARI product directory information.

Equipment Class Efficiency LevelStandard Size PTHP –9,000 Btu/h Cooling Capacity

EER = 10.9

COP = 3.1

EER = 11.1

COP = 3.2

EER = 11.3

COP = 3.3

EER = 11.5

COP = 3.3

E

Standard Size PTHP –12,000 Btu/h Cooling Capacity

EER = 10.2

COP = 3.0

EER = 10.4

COP = 3.1

EER = 10.6

COP = 3.1

EER = 10.8

COP = 3.1

E

Non-Standard Size PTHP –11,000 Btu/h Cooling Capacity

EER = 9.4

COP = 2.8

EER = 9.7

COP = 2.8

EER = 10.0

COP = 2.9

EER = 10.7

COP = 2.9

E

EERE-2007-BT-STD-0012 COMMENT 11
NOPR Analyses Flow Diagram

NOPR Final Rule

Energy UseCharacterization

Market and TechnologyAssessment

ScreeningAnalysis

EngineeringAnalysis

Markups toDetermineEquipmentPrice Life-Cycle

Cost andPayback Period Analysis

ShipmentsAnalysis

EERE-2007-BT-STD-0012 COMMENT 11
 Energy Use Characterization

• To estimate electricity consumed by PTAC and PTHP equipment at selecte

levels using whole-building simulations of hotel/motel buildings located in a 

climates in the United States.

 Markups to Determine Equipment Price

• To characterize the channels for how equipment is distributed from the man

the customer; and

• To determine prices paid by customers based on manufacturer selling price

baseline and higher efficiency equipment.

 Life-Cycle Cost and Payback Period Analyses

• To develop the customer life-cycle cost savings and payback period for hig

equipment.

Purpose

EERE-2007-BT-STD-0012 COMMENT 11
Energy Use Characterization -- Results

 Results obtained for cooling and fan energy use for PTAC and co

heating and fan energy use for PTHP on an annual basis.

 Results were validated by comparing with EIA’s 2003 Commercia

Energy Characterization Survey (CBECS).

 Annual national average energy savings per unit range from 7.9% 

Btu/h standard size PTAC to 12.2% for non-standard size PTAC at maximum efficiency level compared with baseline efficiency level

 Annual national average energy savings per unit range from 8.4% 

Btu/h standard size PTHP to 10.8% for non-standard size PTHP at maximum efficiency level compared with baseline efficiency level

Energy Use C

EERE-2007-BT-STD-0012 COMMENT 11
Distribution Channels 

 Estimated Fraction of Equipment Shipments by Distribution Channe

 New Construction and Replacement Market

Markups to Determine E

Mechanical Contractor

(New Construction or Replacement)

Replacement

New Construction

Manufacturer r

National Account

Customer

Wholesaler

Customer

General

Contractor

Customer Customer

15% 25% 60% 0%

30% 0% 38% 32%

EERE-2007-BT-STD-0012 COMMENT 11
 Inputs

• Firm balance sheets:

– Wholesalers: HARDI’s 2005 Profit Planning Report.– Mechanical and General Contractors: U.S. Census Bureau Financial Data 

Heating, and Air-Conditioning Contractors, 2002 and Air Conditioning Con

America (ACCA) financial analysis data.

• 20% - 80% split of equipment between new construction and replacement mar

respectively.

 Outputs

• Weighted average baseline markups of 2.08 (new construction) and 1.93 (repla

market) for baseline efficiency equipment (including sales tax).

• Weighted average incremental markups of 1.29 (new construction) and 1.28 (re

market) for higher efficiency equipment (including sales tax).

Markups to Determine Equipment Price

Inputs and Outputs

Markups to Determine E

EERE-2007-BT-STD-0012 COMMENT 11
 Life-Cycle Cost (LCC) equals customer price plus the sum of ann

operating costs discounted to a particular base year (2012, in this 

 Economic evaluation from the customer perspective. Analysis implemented in an Excel® spreadsheet with add-on Crist

generate the Monte Carlo simulation.

 Results are expressed as LCC savings (baseline minus standard  Simple payback period (in years) is also calculated and reported i

analysis.

Life-Cycle Cost and Payback P

Life-Cycle Cost Analysis

Combine Changes 

in Costs 

Installed Cost

(Customer Price + Installation Cost)

Operating Expenses

Convert 

to Present 

Value

EERE-2007-BT-STD-0012 COMMENT 11
LCC Calculation Flowchart

Life-Cycle Cost and Payback P

Baseline

Manufacturer

Price

Std-Level

Manufacturer

Price

Total Installed

Cost

From 

Engineering 

Analysis

(Price is a 

Function of 

Efficiency)

From Markups 

for Equipment 

Price 

Determination 

Analysis

Electricity

Prices

Annual Energy

Expense

Repair Cost

Maintenance

Cost

Annual

Operating

Expense

Lifetime

Discount Rate

Electricity

Price Trend

Lifetime

Operating

Expense

From Energy 

Use 

Characterization 

Analysis 

(Energy Use as a 

Function of 

Efficiency)

Payback

Period

Energy

Consumption

Distributor

Markup

Sales Tax

Mechanical

Contractor

Markup

Customer

Price

Installation

Cost

EERE-2007-BT-STD-0012 COMMENT 11
 LCC analysis was based on State-by-State average electricity pricfour business types that use PTAC and PTHP equipment.  Electricity prices by business type were developed using the ratio 

price in 2003 CBECS by business type to commercial average price. These ratios are then applied to the State-by-State average commelectricity prices calculated from EIA data for 2006 to obtain State-belectricity prices by business type.  These State-by-State prices by business type were projected for 2beyond by using EIA AEO 2007 national commercial electricity price The final rule analysis will use the latest EIA data and the AEO 200

Electricity Prices

Life-Cycle Cost and Payback P

EERE-2007-BT-STD-0012 COMMENT 11
 Installation costs (from RS Means CostWorks 2007). Discount rates (weighted average cost of capital—data from Dam

Online website).

 Equipment lifetime (distribution of lifetimes with a 10-year averag

industry comments).

 Repair costs (annualized value based on warranty contracts). Maintenance costs.

Other Inputs

(Issue #5)

Life-Cycle Cost and Payback P

DOE is interested in how the installation, maintenance, and repachange with the implementation of R-410A refrigerant in 2010 beestimates are based on data from the field for equipment using R

EERE-2007-BT-STD-0012 COMMENT 11
Life-cycle Cost A

Average Life-Cycle Cost Savings vs. Efficiency (EER) for R-410 Standard 

PTACs and PTHPs 9,000 Btu/h and 12,000 Btu/h 

($40)($30)($20)($10)

$0

$10$20$30$40$50

9 9.5 10 10.5 11 11.5 12 

Efficiency (EER)

Average LCC Savings (2006$)

R-410A Standard PTAC 9,000 Btu/h R-410A Standard PTAC 12,000 Btu/hR-410A Standard PTHP 9,000 Btu/h R-410A Standard PTHP 12,000 Btu/h

EERE-2007-BT-STD-0012 COMMENT 11
NOPR Analyses Flow Diagram

NOPR Final Rule

Energy UseCharacterization

Market and TechnologyAssessment

ScreeningAnalysis

EngineeringAnalysis

Markups toDetermineEquipmentPrice Life-Cycle

Cost andPayback Period Analysis

ShipmentsAnalysis

EERE-2007-BT-STD-0012 COMMENT 11
Purpose

 Shipments Analysis

• To estimate standard size and non-standard size PTACs and PTHPs shipm

time.

 National Impact Analysis

• To estimate the National Energy Savings (NES) from standard and non-sta

and PTHP efficiency standards at different efficiency levels.

• To estimate the national economic impact on the nation (or the Net Present 

(NPV)) from equipment energy conservation standards at different efficienc

EERE-2007-BT-STD-0012 COMMENT 11
Approach

National 

 Considers all customer choices, including energy-saving and non-

saving substitutes.

 Shipment forecasts (2012-2042) derived from:

• Historical shipments;• PTAC and PTHP replacements based on equipment lifetimes;• New installations based on the projected floor space construction published b

Energy Outlook 2006 forecasts; and

• Estimates of the equipment mix of baseline and higher-efficiency technologie

and shipments.

 National energy savings calculated from 2012-2042 and NPV calcu

2012-2062.

 Base case incorporates the penetration of higher efficiency PTACs 

 Shipments and stocks of equipment tracked by vintage, market (ne

replacement), and equipment class.

EERE-2007-BT-STD-0012 COMMENT 11
Shipments Model

National I

NEMS Bldg

Construction Forecast

ARI Estimate of 

Shipments (2005)

Initial Replacement 

Shipments 

Initial Shipments to New 

Construction 

Initial Equipment Stock

Estimated Lifetime 

of Equipment Stock

Shipments to New 

Construction 

Replacement 

Shipments 

Total 

Shipments By 

Equipment 

Class and 

Capacity

% Shipments by 

Equipment Class and 

Capacity (2005)

Equ

Sto

Equ

Cla

Ca

NEMS Bldg

Construction Forecast

ARI Estimate of 

Shipments (2005)

Initial Replacement 

Shipments 

Initial Shipments to New 

Construction 

Initial Equipment Stock

Estimated Lifetime 

of Equipment Stock

Shipments to New 

Construction 

Replacement 

Shipments 

Total 

Shipments By 

Equipment 

Class and 

Capacity

% Shipments by 

Equipment Class and 

Capacity (2005)

Equ

Sto

Equ

Cla

Ca

EERE-2007-BT-STD-0012 COMMENT 11
Outcomes of Shipments Forecasts: Ship

PTAC and PTHP Shipments

0

100200300400500600700800

2000

2003

2006

2009

2012

2015

2018

2021

2024

2027

2030

2033

2036

2039

Years

Thousands

New SalesTotal Replacements from New Vintages (Multiple RoundsTotal Non-Standard SalesReplacements for Yr 2000 Existing Standard Stock

EERE-2007-BT-STD-0012 COMMENT 11
Outcomes of Shipments Forecasts: Stoc

Stock of PTAC and PTHP Units,

Including Replacements

-

1,0002,0003,0004,0005,0006,0007,000

2000

2004

2008

2012

2016

2020

2024

2028

2032

2036

2040

2044

2048

2052

2056

Thousands

Years

Cumulative New Standard Units (Including Replacements)Non-Standard Units Existing in 2000Standard Units Existing in 2000

EERE-2007-BT-STD-0012 COMMENT 11
Key Inputs

(Issue #4)

National 

 National Discount Rate: 3% and 7% (real) from OMB’s Regulatory A

Circular A-4 (2003).

 Electricity Prices and Trends: Energy Information Administration 2

Annual Energy Outlook 2007 forecasts.

• DOE will update to most recent data for the Final Rule.

 Rebound Effect: Operating cost savings resulting in increased equ

and therefore reduced energy savings potential.

• None. DOE believes that since the customer renting a hotel/motel room does 

utility bill, the customer’s usage will be unaffected by increasing the efficiency PTHP equipment.

DOE invites comment on the rebound effect for the PTAC and PTHP 

EERE-2007-BT-STD-0012 COMMENT 11
Issues for which DOE seeks comments

(Issue #6-9)

National Im

6. DOE requests data that would enable it to better charac

the likely increases in efficiency that would occur over tyear analysis period in the absence of this rule (i.e., the distribution of efficiency levels in absence of standards assumed to be constant).

7. The NES-forecasted base case distribution of efficiencie

the refrigerant phaseout and its prediction on how amenenergy conservation standards impact the distribution oefficiencies in the standards case.

8. Whether amended energy conservation standards will r

PTAC and PTHP customers shifting to other, less efficieequipment types.

9. The NES shipments forecasts of total shipments for sta

size and non-standard size equipment. In addition, the distribution of standard size equipment being placed inconstruction buildings versus replacing existing units.

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Utility Im

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
 Purpose

• To develop a list of standard levels from which impacts are weighed and a pro

level is selected.

– Each trial standard level consists of a set of potential minimum efficiency 

all equipment classes, and may vary between equipment classes; and

– NOPR analyses assess impacts for trial standard levels (not equipment 

 Method 

• Trial standard levels are assembled from the equipment classes identified in t

– Analyzed standard levels cover a range of efficiencies and can include:

 Most energy efficient level (max tech); Efficiency level with the lowest life-cycle cost; Efficiency level with a payback period of three years or less;

 Efficiency levels with noteworthy technologies; and Efficiency levels that fill in large gaps between candidate standard 

– Each trial standard level consists of the analyzed standard level from ea

class that meets one of the above criteria.

Trial S

Selection of Trial Standard Levels

EERE-2007-BT-STD-0012 COMMENT 11
Trial S

Trial Standard Levels for the NOPR (R-410A)

Equipment Class Efficiency Metric Baseline (ASHRAE/IESNA Standard 90.1-1999) TSL 1 TSL 2 TSL 3 TSL 4 TSL 5 

PTAC, Standard Size, 9,000 Btu/h EER 10.6 10.9 10.9 11.1 10.9 11.3 PTAC, Standard Size, 12,000 Btu/h EER 9.9 10.2 10.2 10.4 10.2 10.6 PTAC, Non-Standard Size, 11,000 Btu/h EER 8.6 9.4 9.4 9.7 9.4 10.0 PTHP, Standard Size, 9,000 Btu/h

EER

COP

10.4

3.0

10.9

3.1

11.1

3.2

11.1

3.2

11.3

3.3

11.3

3.3

PTHP, Standard Size, 12,000 Btu/h

EER

COP

9.72.9

10.2

3.0

10.4

3.1

10.4

3.1

10.6

3.1

10.6

3.1

PTHP, Non-Standard Size, 11,000 Btu/h

EER

COP

8.52.6

9.42.8

9.72.8

9.72.8

10.0

2.9

10.0

2.9

Equipment Classes TSL 2 TSL 4

PTACs TSL 1 TSL 1PTHPs TSL 3 TSL 5

“Mixed” Trial Standard Levels for the NOPR (R-410A)

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Utility Im

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer Impact Analysis

Manufacturer I

 Purpose

• To assess the impacts of standards on commercial refrigeration equipment m• To identify and estimate impacts on manufacturer sub-groups that may be m

impacted than the industry as a whole; and

• To examine the impact of cumulative regulatory burdens on the industry.

 Method 

• Analyze industry cash flow and net present value through use of the Governm

Regulatory Impact Model (GRIM); and

• Interview manufacturers to refine inputs to the GRIM, develop sub-group ana

address qualitative issues.

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer Impact Analysis Process

Manufacturer I

 The MIA consists of three phases:

Industry profile

Develop straw-man GRIM*

Develop interview guide

Interviews

& industrywide / 

subgroup

analyses

Assess direct employment, competition, cumulative burden

Phase 2

* Government Regulatory Impact Model (GRIM)

Phase 1 Phase 3

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer Impact Analysis Results

Manufacturer I

 Industry Net Present Value Impacts

• Standard size and non-standard size impacts by TSL.

 Cumulative Regulatory Burden Impacts

• Refrigerant phaseout.

 Qualitative Concerns

• Refrigerant phaseout (e.g., compressor availability and compressor degrada• Product conversion and capital costs;• Timing of the refrigerant phaseout and amended energy conservation stand• Definition of non-standard equipment; and• Ability to recover increases in manufacturing production costs from the cons

 Small Business Impacts

• Two small business of PTACs and PTHPs.

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer Impact Analysis Results for 

Non-Standard Size PTAC and PTHP Equipme

(Issue #13)

Manufacturer 

DOE invites comment on the unique impacts on the non-standard size equipment and manufacturers. In particular, would the ASHRAE/IESNA Standard 90.1-1999 delineations of non-standard size equipment result in PTAC and PTHP lines being misclassified ounavailable?

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Utility Im

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
 Purpose

• To investigate the effects on utilities from reduced energy sales and peak load 

potential standards.

 Method 

• Uses national energy savings results; and• Uses the EIA’s National Energy Modeling System (NEMS-BT) tailored for DOE

Technologies Program.

 Output

• Change in electricity sales and price by region;• Change in the mix of electricity generation; and• Change in new capacity construction.

Utility Im

Utility Impact Analysis

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Employment I

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
 Purpose

• To report net jobs created or eliminated nationally as a consequence of new or 

energy conservation standards.

 Method 

• Uses the Impact of Sector Energy Technologies (ImSET) model;• Changes in equipment and energy expenditures taken from the National Energ

Analysis; and

• Direct employment impacts taken from the Manufacturer Impact Analysis.

 Output

• Change in employment by sector as a consequence of new or amended energ

standards.

Employment I

Employment Impact Analysis

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental 

Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Environment

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
 Purpose

• To report environmental impacts as a consequence of new or amended energy 

standards, including changes in power plant emissions.

 Output

• Calculated the reduction in power plant emissions of carbon dioxide (CO2), oxi

(NOX) and mercury (Hg), using the NEMS-BT computer model.

• Sulfur dioxide (SO2) emission was not included due to the emission cap set by 

Act Amendments of 1990. 

• Monetized value of carbon reduction.

Environment

Environmental Assessment

EERE-2007-BT-STD-0012 COMMENT 11
Manufacturer

Impact 

Analysis

Utility

Impact 

Analysis

TrialStandardLevels

Environmental Assessment

ReImAn

NOPR Analyses Flow Diagram

Employment

Impact 

Analysis

Regulatory Im

NOPR Final 

Rule

Effective

Date

EERE-2007-BT-STD-0012 COMMENT 11
 Purpose

• To investigate the national impacts due to non-regulatory alternatives comp

mandatory energy conservation standards.

• The non-regulatory alternatives that may be considered: 

– No new regulatory action; early replacement; prescriptive standards; c

credits; manufacturer tax credits; customer rebates; voluntary efficienc

government procurement.

 Method

• Modify NES spreadsheet model to consider scenarios. Changes may includ

and escalation factors; implicit market discount rates; customer purchase prcost, and income elasticities; and equipment stock data.

 Output

• National Energy Savings and Net Present Value of the non-regulatory altern• Impact of non-regulatory alternatives on purchase price and use of energy-e

equipment.

Regulatory Im

Regulatory Impact Analysis

EERE-2007-BT-STD-0012 COMMENT 11
Summary of Issues on which DOE seeks comment - NOPR 

Issues for Publ

1. Addendum t to ASHRAE/IESNA Standard 90.1-2007.

2. Extrapolating the engineering analysis to other cooling capacities.

3. The EER and COP pairings for PTHPs.4. The rebound effect for the PTAC and PTHP industry.

5. Estimation of installation, maintenance, and repair costs for R-410A equipmen6. Assumption that forecasted market shares of PTACs and PTHPs at each effic

remain frozen beginning in 2012 until the end of the forecast period (2042).

7. The NES-forecasted distribution of efficiencies after the refrigerant phaseout.

8. Equipment shifting as a result of amended energy conservation standards.

9. NES shipments forecasts.10. Proposed standard level, TSL 4.11. Consideration of a higher or lower TSL, including the baseline efficiency levels

12. Potential equipment switching as a result of different standard levels for PTAC13. The non-standard PTAC and PTHP industry.14. Labeling for PTACs and PTHPs.

EERE-2007-BT-STD-0012 COMMENT 11
Issues Raised by Interested Parties

as of 04/28/08

Issues for Publ

1. Equipment switching will be very likely in the non-standard size industry becaus

is very competitive and most (if not all) equipment is sold based on price only.

2. By setting the proposed energy conservation standards of PTHPs at significant

than PTACs, DOE is likely to get a very unwanted period of time between Janu

September 30, 2012, where all R-410A system efficiencies are going to be signthan the proposed levels in NOPR, and less than today’s R-22 levels.

EERE-2007-BT-STD-0012 COMMENT 11
How to Submit Comments...

 Public Meeting – Oral comments will be captured in the transcript and 

part of the public record.

 Written comments – NOPR comment period open until May 31, 2008

Reference docket #: EERE-2007-BT-STD-0012 and/or RIN #: 1904–

Email: ptac_hp@ee.doe.govMail: Ms. Brenda Edwards

U.S. Department of EnergyBuilding Technologies Program, Mail stop EE-2JNOPR for Packaged Terminal Air Conditioners and Heat PEERE-2007-BT-STD-00121000 Independence Avenue, SWWashington DC, 20585-0121

Courier: Ms. Brenda Edwards

U.S. Department of EnergyBuilding Technologies Program950 L’Enfant Plaza, 6th FloorWashington, DC 20024

EERE-2007-BT-STD-0012 COMMENT 11
Backup Slides 

EERE-2007-BT-STD-0012 COMMENT 11
Baseline and Incremental Markups

 Markups relate customer price to cost of goods sold (COGS) Baseline markups relate price to cost prior to a change in efficien

• Baseline markups indicate a customer price that covers all of a wholesaler’s 

expenses plus profit.

• Direct labor costs (salaries, payroll, rental and occupancy) are included.

 Incremental markups relate the incremental change in customer p

incremental change in COGS beyond baseline

• Some distribution costs remain constant with COGS increases.• Incremental markups cover only expenses that vary with an increase in equip

– For example, direct labor costs (salaries, payroll), rental, and occupancy 

efficiency-induced changes in COGS.

• DOE assumes other operating costs and profit will scale proportionally with C

Markups to Determine E

EERE-2007-BT-STD-0012 COMMENT 11
Shipments by Equipment Class

Shipments of PTACs and PTHPs

-

100200300400500600700800

2006

2007

2008

2009

2010

2011

2012

2013

2014

2015

2016

2017

2018

2019

2020

2021

2022

2023

2024

2025

2026

2027

2028

2029

2030

2031

2032

2033

2034

2035

2036

Year

Thousands of Units

Standard-Size PTACs, ≤10,000 BTU/Hr Standard Size PTACs, >10,00Standard-Size PTHPs, ≤10,000 BTU/Hr Standard Size PTHPs, >10,00Non-Standard Size PTACs Non-Standard Size PTHPs

EERE-2007-BT-STD-0012 COMMENT 11
National Impact Analysis Process

Shipments Model

National Energy Savings

NationalEconomicImpacts

LCC Analysis Results and Other Inputs

N

Ener

(

N

Net P

(2006 

 National energy savings calculated for period from 2012-2042 (30 ye NPV calculated for period from 2012-2062

EERE-2007-BT-STD-0012 COMMENT 11
NES and NPV Flow Chart

Stock of Units 

by Year

Units Shipped 

by Year

Shipments by 

Equipment 

Class and 

Efficiency Level

Unit Installed 

Costs,

Energy Use, 

Other Operating

Costs

Shipments 

Analysis

Market 

Shares by 

Equipment 

Class

Annualized 

Costs 

Calculations by 

Risk Group

Stock by 

Equipment 

Class and 

Efficiency Level

Total Installed Costs 

by Year, Equipment 

Class, Efficiency 

Level

Total Energy 

Used, Energy 

Costs, and 

Other 

Operating 

Costs 

Electri

Price

Foreca

Energ

Informa

Administr

LCC Model

Unit Electricity 

Used, Electricity 

Cost per Unit, Other

Operating Costs 

Discount 

Rates and TSL

Levels 

Cumulative Energy Use

PV Costs

Annualized Costs

Net Present Value

Net Annualized Costs

Market Shares by Equipment Class

EERE-2007-BT-STD-0012 COMMENT 11